More than 20 years after Congress passed the Military Housing Privatization Initiative—designed to improve the quality of existing on-base housing and address the shortage of units available to service members—tens of thousands of units across upwards of 150 bases were developed and renovated.
Corvias Property Management is one of a handful of major players in the military housing sector. The firm has either built or revitalized 16,400 units on bases across the U.S. Tim Toohey, the company’s managing director, spoke with Multi-Housing News about the challenges and opportunities inherent in private military housing operations.
What factors are drawing investors to the military housing sector in 2019?
Toohey: The primary reasons we’re seeing more investors enter this space are threefold. First, there is a significant unmet need for new homes in military housing. Second, there is a continuing need for renovations to the homes—roughly 55 percent of our portfolio consists of homes built prior to the 2000s. Finally, since we are dealing with a portfolio of older homes, many require energy-efficiency upgrades.
How unique are military housing management practices?
Toohey: At a conventional community, you may not know the day-to-day challenges your residents are facing. Our residents experience a variety of circumstances including deployments of up to a year, temporary duty assignments that take them away from home for months at a time and permanent changes of station that require them to move outside of the lease. What this can mean for military families is disruption and stress, not only for the military member, but also for the parents and children who are continually moving to new communities and new schools.
While it’s important that our organization has standard operating procedures to follow, it is important that we have team members who can identify and adapt to special circumstances that need special consideration. As an example, a popular practice of ours is called a Honey-Do service—if the service member is serving a deployment or away for work reasons, the spouse can call our team and ask for assistance with things such as hanging pictures, changing light bulbs or helping to move a couch. These little things really are not so little. If we’re able to help eliminate one challenge for our military families, that is a win. In a nutshell, our practices may not be wildly different, but our approach to solving problems typically is outside of the normal practices.
Given the often transient nature of military service, what difficulties can this present in terms of occupancy?
Toohey: Occupancy can be tricky due to the nature of military service and the potential for long periods of time away from home … The biggest challenge we face is not having enough homes available for families upon their arrival. For example, many of our waitlists across our installations can be anywhere from three to 12 months. While a waitlist can be beneficial in property management, we consider it a challenge due to the huge predicament it creates for military families moving into the area. Many families rely upon and prefer to live in base housing.
Another challenge is trying to accurately project occupancy in the military housing sector. Military members do not have traditional rental agreements due to the nature of their profession. For example, we may experience a last-minute deployment where spouses choose to move closer to other family members during the duration, creating an unplanned occupancy challenge.
How involved in on-base property operations is the U.S. military?
Toohey: The level of involvement varies from installation to installation, but our Army and Air Force partners are involved in how operations impact military families. We welcome and encourage involvement from our military partners and their input is important to the success of each project. Our military partners are key participants in developing our strategy.
What challenges exist in updating older military housing assets and how can an investor or manager overcome these?
Toohey: There are considerable challenges in updating dated military housing. Finding the funding for improvement projects and new construction is always a factor. To overcome these challenges, we must have support from our military partners to bolster occupancy in our communities. Without occupancy, we do not have money to reinvest back into housing projects.
One of the major myths of military housing is that the basic allowance for housing—the military’s monthly stipend for housing which sets rent levels—goes back into the project owner’s pocket. That is a major misconception: Funds which are left over after expenses are paid are used to fund future projects for that specific installation, including renovating dated housing. Sometimes we don’t have the luxury of having extremely high occupancy due to various military mission reasons and that is when we must rely on communication with our military partners and creative solutions to have the funds necessary to do complete improvements.
What role does technology play in military housing operations?
Toohey: Technology plays a huge role in military housing operations, as we are typically communicating with people who are hundreds, sometimes thousands of miles away. Today, every resident has a smartphone and expects to be able to easily manage every facet of their life from it, including their home needs. To meet these needs, we recently rolled out a new resident maintenance portal which allows our residents to submit and track the life of their work orders via their mobile phone.
In addition to the mobile app, we are continuously improving our website—residents who lease a home sight unseen will be able to get a much better idea of what their future home and community are like via photos, videos and virtual tours. We also host social communities on Facebook so that we are meeting residents where they prefer to communicate.
With legislation in the works to change the way private military housing operators function, what effects could this have on private investment in on-base housing?
Toohey: We support the new legislation outlining the involvement of our military partners as well as the military housing Tenant Bill of Rights that is currently being drafted. These rights will create a level of consistency among the different community providers. If both the project owner and military partners have a required level of commitment and engagement with one another throughout the lifetime of a project, it creates a true partnership. When you are taking care of military families, there’s really no room for politics.
